Cisco has released the findings of a global study that indicates cloud is moving into a second wave of adoption, with companies no longer focusing just on efficiency and reduced costs, but rather looking to cloud as a platform to fuel innovation, growth and disruption.
The Cisco-sponsored study, Don’t Get Left Behind: The Business Benefits of Achieving Greater Cloud Adoption, was developed by International Data Corporation (IDC), and finds that 53 per cent of companies expect cloud to drive increased revenue over the next two years. Unfortunately, this will be challenging for many companies as only 1 per cent of organisations have optimised cloud strategies in place while 32 per cent have no cloud strategy at all.
In the study IDC identifies five levels of cloud maturity: ad hoc, opportunistic, repeatable, managed and optimised. The study found that organisations elevating cloud maturity from the ad hoc, the lowest level to optimised, the highest, results dramatic business benefits, including:
- Revenue growth of 10.4 per cent
- Reduction of IT costs by 77 per cent
- Shrinking time to provision IT services and applications by 99 per cent
- Boosting IT department’s ability to meet SLAs by 72 per cent
- Doubling IT department’s ability to invest in new projects to drive innovation.
The study also quantified the economic benefits the most mature cloud organisations are realising. Organisations studied are gaining an average of $1.6 million in additional revenue per application deployed on private or public cloud. They are also achieving $1.2 million in cost reduction per cloud-based application.
The revenue increases were largely the result of sales of new products and services, gaining new customers, or selling into new markets. Organisations were able to attribute revenue gains to increased innovation resulting from the shifting of IT resources from traditional maintenance activities to new, more strategic, more innovative initiatives.
Operational cost reductions associated with cloud stem from the advantages to the business of running on a more scalable, reliable, and higher-performing environment. These include improved agility, increased employee productivity, risk mitigation, infrastructure cost savings and open source benefits.
Private cloud allows better resource use, greater scale, and faster time to respond to requests, but with the added control and security of dedicated resources for a single company.
Adopting hybrid cloud can be more complex than adopting other forms of cloud. It requires workload portability, security, and policy enablement. These requirements were evident in the study, which showed that up to 70 per cent of respondents expect to migrate data between public and private clouds (or among multiple cloud providers) and have high security and policy requirements.
Mature cloud adoption varies by country, with the US and Latin America among the countries with the greatest percentage of organisations with repeatable, managed or optimised cloud strategies, and Japan with the fewest among the countries studied.
“As we talk with customers interested in moving to the second wave of cloud, they are far more focused on private and hybrid cloud,” said Nick Earle, Senior Vice President, global cloud and managed services sales, Cisco. “Primarily because they realise that private and hybrid offer the security, performance, price, control and data protection organisations are looking for during their expanded efforts. This observation, which drove our strategy to build a portfolio of private and hybrid infrastructure and as-a-service solutions, is reflected in the new IDC study.”